My Employer Gave Me a Severance Agreement. What Should I Check Before Signing?

What You're Actually Giving Up

Most agreements include a broad release of claims, meaning you can't sue over anything related to your employment, even issues unrelated to the reason you were let go.

It's worth pausing on why an employer offers severance at all, since the answer shapes how much room there is to negotiate. Severance is almost never a legal requirement in California outside of specific situations like a contractual promise or a mass layoff triggered under state or federal notification laws. Employers offer it because they want the release, the certainty of not being sued, more than they want to hand out free money. That means the payment isn't a gift, it's compensation for something valuable you're giving up, and it should be evaluated that way.

Example

The agreement releases 'any and all claims,' which can include wage claims you didn't even realize you had.

Most releases can't legally wipe out every possible claim, and it's worth knowing where those limits generally sit. Certain rights, like the ability to file a charge with a government agency such as the EEOC or California's civil rights agency, or to collect workers' compensation benefits, generally survive a release regardless of what the agreement says. Vested retirement benefits and unemployment insurance eligibility are also typically outside what a severance agreement can take away. That doesn't mean the release is meaningless, it just means "any and all claims" has some real boundaries worth understanding before you assume you've signed away everything.

How Much Time You Really Have

Federal law generally requires at least 21 days to consider a severance agreement (45 for group layoffs), plus a 7-day window to revoke after signing. Don't let a rushed deadline pressure you.

These minimum periods generally apply only when you're being asked to release age discrimination claims, which is common but not universal, so the specific timeline can vary depending on exactly what's being released and your age at the time. Regardless of which minimum technically applies, treat any deadline shorter than what's described here as a signal to slow down rather than speed up, and don't assume a shorter deadline listed in the document itself overrides what the law actually requires.

Example

You were told to sign within 48 hours. That's not how much time you're legally entitled to.

These timelines exist specifically because severance decisions are made during an emotionally difficult moment, right after a job loss, when people are most likely to sign quickly just to move on. Take the full consideration period even if you're fairly sure you'll accept the offer. Reviewing the agreement carefully, asking questions, and sitting with the numbers for a few days costs you nothing, and an employer pressuring you to sign faster than the law requires is itself worth treating as a red flag about how the rest of the negotiation might go.

Red Flags in the Release Language

Watch for language that waives claims you haven't even raised yet, restricts you from discussing your pay, or includes a non-disparagement clause broader than it needs to be.

Example

A clause that also tries to waive wage claims you were never told about.

Also look closely at confidentiality and non-disparagement clauses that extend beyond just keeping the settlement terms private. Some agreements try to bar you from discussing your working conditions at all, or from responding truthfully to a future employer's reference check, which can raise its own legal problems. And check whether the agreement includes a general liability release that also purports to cover your former employer's officers, affiliates, or parent companies, since that broader scope can matter if you later learn about a claim against one of those related entities.

When to Get a Second Look

Because a severance agreement is often the last chance to raise a claim, it's worth having someone review it before you sign, not after. A free case review is a good place to start.

Severance questions rarely exist in isolation, they usually sit alongside a termination that deserves its own look. Reading up on employment contracts and severance can help you understand what you might be releasing before you sign anything. See our full employment contracts and severance guide for more.

It's worth thinking through the timing of the review as well as the substance of it. The best time to have someone look at a severance agreement is right after you receive it, before you've said anything to HR about accepting or negotiating, since some of the leverage in a negotiation comes from the employer not yet knowing how you'll respond. Once you've verbally agreed to terms, it becomes harder, though not impossible, to go back and negotiate for more.

Who This Affects Most

Severance agreements come up constantly in layoffs at tech and professional services companies in San Francisco and Sacramento, and in leadership and management transitions at companies in Beverly Hills and San Diego. Hourly workers in retail and hospitality across Fountain Valley and San Bernardino are offered severance less often, but when they are, the agreements tend to include the same broad releases and deserve the same scrutiny.

Employees over 40 deserve a specific mention here, since federal law imposes additional disclosure requirements when severance is offered as part of a group layoff or reduction in force affecting older workers, including information about the ages and job titles of everyone who was and wasn't selected. If you're over 40 and part of a layoff involving multiple employees, check whether your agreement includes this disclosure information, since its absence can affect whether the release is enforceable at all.